Tricorn : Interim Results

23 June 2020

Tricorn Group plc

Interim Results

For the six months ended 31 March 2020

Tricorn Group plc ('Tricorn' or the 'Group'), (AIM: TCN.L) the tube manipulation specialist, announces its unaudited interim results for the six months ended 31 March 2020. These results are further to Tricorn's announcement on 2 April 2020 of a change in its year end from 31 March to 30 September.

Summary

· Results significantly impacted by COVID-19 pandemic

· Successfully completed a Placing and Open Offer of new ordinary shares at 10p per share on 5 February 2020 raising net proceeds of £1.335m

· Cash headroom £1.8m at 1 June 2020

· All Group facilities operational from 20 April 2020 onwards

Financial Summary

	Unaudited six months 31 March 2020	Unaudited six months 31 March 2019	Audited 12 months 31 March 2019
		Restated***	Restated***
	£'000	£'000	£'000
Revenue	8,453	11,348	22,763
EBITDA*	118	1,120	2,250
(Loss)/Profit before tax*	(572)	511	1,041
Cashflow generated by operations	(802)	1,060	1,566
Cash & cash equivalents	766	493	493
Net Borrowing **	(3,628)	(3,112)	(3,112)
(Loss)/Earnings per share - basic*	(1.51)p	1.44p	2.89p
Dividend	-	0.2p	0.2p

*All references to EBITDA, operating profit, profit before tax and EPS are before intangible asset amortisation, share based payment charges and Rabun Gap start up costs

** Net Borrowing excludes the impact of finance lease liabilities and operating lease liabilities as defined by IFRS 16

*** Comparative periods' profit, EPS and cashflow generated by operations have been restated for the impact of IFRS 16 Leases

Commenting on the results and the Group's prospects, Andrew Moss, Chairman of Tricorn, said:

'This has been an extremely challenging period, during which our operations worldwide have been significantly impacted by COVID-19. During March, our facilities in the USA and UK were temporarily closed due to issues with customer demand, supply chains and concerns for employee safety.

Throughout, the Board has remained focused on the safety of our employees, supporting our customers, with whom we continue to work closely, and mitigating the impact of the lower revenues on the Group's profitability and cash flow.

I am pleased to report that all of our facilities were operational from 20 April 2020 onwards. Our Chinese joint venture continues to operate normally, and, trading at our UK Malvern facility has returned to pre-COVID-19 levels. However, whilst demand has started to increase at the UKWest Bromwich and USA facilities, it is still at significantly lower levels than compared to earlier in the year.

At this time, as for many businesses, the outlook remains uncertain. We are, however, pleased that as a result of a focused plan of action, as at 1 June 2020, the Company had, as reported, cash headroom of £1.8m. This positions us well to weather these exceptional times and to capitalise on growth opportunities as we move forward.

Enquiries:

Tricorn Group plc	Tel [phone]
Mike Welburn, Chief Executive	www.tricorn.uk.com
Phil Lee, Group Finance Director	[e-mail]
Shore Capital	Tel + 44 (0)20 7408 4080
Tom Griffiths/David Coaten (Corporate Advisory) Henry Willcocks (Corporate Broking)

Notes to Editors:

Tricorn is a value added manufacturer and specialist manipulator of pipe and tubing assemblies to niche markets worldwide.

Headquartered in Malvern, UK, Tricorn employs around 300 employees and has five manufacturing facilities in the UK, USA and China.

Chairman's and Chief Executive's statement

Performance in the six months ended 31 March 2020

The results of the Group for the six months ended 31 March 2020 (the 'period') were significantly impacted by the COVID-19 pandemic. Whilst the Group had been able to re-open its Chinese joint venture in mid-February, following a brief period of closure, significant disruption, as detailed in the Group's announcement on 20 March 2020, has been experienced elsewhere in the Group's facilities.

Both Tricorn's UK facilities were temporarily closed on 25 March 2020 amidst safety concerns for employees and following serious disruption to supply chains and numerous customer closures. The Group's USA facilities closed a few days later with similar concerns and challenges.Most of the Group's UK and US employees were furloughed from the end of March, with the remaining key staff focused on ensuring that the Group's facilities were in full compliance with the latest Government guidelines to allow an early and safe restart once supply chains and customer demand were re-established.

The Group's UK and US facilities reopened from 20 April 2020 onwards, albeit with reduced staffing levels and employees continuing to work from home wherever possible.

Revenue and profit before tax* were significantly impacted. Revenue at £8.453m for the period was 25.6% lower than the six months ended 31 March 2019 (the 'corresponding period') (2019: £11.348m). Loss before tax was £0.572m (2019: profit £0.511m).

The UK Job Retention Scheme and the USA furlough scheme have, and continue to be, utilised by the Group and £0.55m has also been obtained through the USA Payroll Protection Program. The Group has also secured an additional £1.0m of funding through the UK Government's Coronavirus Business Interruption Loan Scheme ('CBILS') facility from its existing bank, HSBC. This loan has a 6-year term with the first year being free of interest and capital repayments and an annual interest rate thereafter of 3.99% over the Bank of England's base rate. Combined with the other measures taken, this provided the Group, as of 1 June 2020, with cash headroom of £1.8m.

Operational Review

The Group has five manufacturing facilities across the UK, USA and China. These locations make it ideally positioned to support its blue-chip OEM customer base, many of whom are seeking to localise supply and technical support for their facilities in these key regions. At the start of the year, the Group consolidated its brands with Franklin Tubular Products and the more recently announced expansion at Rabun Gap operating as Tricorn USA and Malvern Tubular Components and Maxpower Automotive as Tricorn UK. The joint venture in China remains as Minguang-Tricorn Tubular Products. Reporting is now on a geographic segment basis.

UK

The Group has two manufacturing facilities in the UK located in West Bromwich and Malvern. The Malvern facility specialises in the design and manufacture of larger tubular assemblies and fabrications for engine, cooling and generator set applications. Its customer base serves the power generation, oil and gas, mining and marine applications markets. The West Bromwich site is focused on rigid, nylon and hybrid tubular products for engines, hydraulic actuation, transmission lubrication and fuel sender sub-systems. Key end markets are on and off road applications including construction, trucks and agriculture.

Demand had slowed in the UK compared to the previous six months with a further softening through February 2020 as some customers experienced supply shortages from China. However, the situation deteriorated rapidly through March. As set out above, both Tricorn UK facilities were temporarily closed on 25 March 2020 amidst safety concerns for employees and following serious disruption to supply chains and numerous customer closures.

Revenue at £5.125m was 27.3% down on the corresponding period (2019: £7.047m). Segmental loss was £0.208m (2019: profit £0.596m).

USA

In the USA, in May 2019, the Group had extended its capabilities with the purchase of a custom built, powder coat and wet spray painting line located in leased premises at Rabun Gap, Georgia, a short distance from its manufacturing facilities at Franklin, North Carolina. This facility has allowed previously sub-contracted processes to be brought in-house as well as providing for further expansion of manufacturing facilities when market conditions improve.

Market demand slowed in the period when compared to the previous six months with this reduction escalating through March 2020 due to the impact of COVID-19. Revenue at £3.328m was down 22.6% on the corresponding period (2019: £4.301m). Segmental loss in the period was £0.360m (2019: loss £0.146m).

Joint Venture

Our Chinese joint venture, Minguang-Tricorn Tubular Products, performed well. The facility was re-opened in mid-February 2020 following a brief period of closure and has remained operational since that time. The Group's share of profit for the six months ended 31 March 2020 was £0.087m (2019: £0.132m).

Financial Review

As stated above, the results for the six months ended 31 March 2020 were significantly affected by the impact of COVID-19. In China, following the Chinese Spring Festival, the majority of businesses, including our joint venture were not allowed to reopen. Our management worked closely with the local government and agreed a range of measures that allowed our facility to be reopened within 2 weeks. Through February and into March, the UK and US divisions of the Group were experiencing a level of volatility in customer schedules brought about by the impact on customers' schedules and supply chains as COVID-19 started to spread beyond China. Subsequently, towards the end of March, the Group closed its UK facilities, with the US following suit soon afterwards.

All of the Group's manufacturing facilities were reopened and operational from 20 April 2020 onwards, albeit at reduced volumes.

As a result of the impact of, and uncertainty around COVID-19, and, in particular, the impact on the movement of people and social distancing, the Group announced on 2 April 2020, after consultation with its auditors, that the required timescales in which to complete its year end audit were unachievable and, as a result, that it would change its accounting reference date from 31 March to 30 September. These results are therefore unaudited interim results for the six months to 31 March 2020 and audited accounts for the 18 month period to 30 September 2020 will be released during December 2020.

As reported in its interim results statement for the six months to 30 September 2019, the Group has adopted IFRS 16 Leases under the modified approach. Using this approach, the Group is not required to restate the detailed financial statements for prior periods. However, where it is appropriate for comparative purposes, key performance indicators used in the highlights and commentaries have been restated.

Interim results are shown for the six months to 31 March 2020 with comparatives to the same period in the prior year.

As a result of the impact of COVID-19 towards the end of the current period, the Group's EBITDA for the current period was £0.118m (2019 Restated: £1.120m) and underlying loss before tax was £0.572m (2019 Restated: profit £0.511m).

Income Statement

Revenue for the current period, at £8.453m, decreased by 25.6% over the corresponding period (2019: £11.348m). While the Group had previously indicated lower revenues were expected for the six months to 31 March 2020, predominantly through weaker US markets, COVID-19 impacted heavily the 1 January 2020 to 31 March 2020 quarter. All of the Group's divisions were affected. In line with Group policy when reporting the results for its joint venture in China, the Group has reported its share of the profit before tax whilst the revenue figure for the joint venture is not reported in the Group's consolidated income statement.

Gross margins were broadly in line with the corresponding period at 37.9% (2019: 38.3%) and the Group managed to reduce its distribution costs to £0.357m (2019: £0.512m). However, the Group's administration costs at £3.324m (2019: £3.327m) were largely unchanged as a result of the volatility and speed with which business was impacted by COVID-19 related circumstances towards the end of the period.

The Group's Chinese joint venture, Minguang-Tricorn Tubular Products, managed to put in place cost saving measures during the planned Chinese Spring Festival shutdown, to minimise the financial impact of COVID-19 through February. As a result, the Group's share of profit for the period was £0.087m (2019: £0.132m).

As previously indicated, the Group has now adopted IFRS 16 Leases. The impact on the Group has been largely immaterial in the current period, with a reduction to underlying PBT in the period of £0.024m. After finance charges, the Group underlying loss before tax was £(0.572)m (2019 Restated: profit £0.511m).

After deducting intangible asset amortisation and share based payment charges, the loss before tax for the current period was £0.774m (2019 Restated: profit £0.450m).

Basic loss per share for the current period was 2.20p (2019 Restated: EPS 1.33p) and after adjusting for non-underlying items, the underlying loss per share was 1.65p (2019 Restated: EPS 1.44p). For the 12 month cumulative period to 31 March 2020, the underlying loss per share was 0.88p (2019 Restated: EPS 2.89p).

The Board is not recommending the payment of a dividend.

Cash Flow

As indicated in the Group's announcement of its interim results for the six months to 30 September 2019, cash generated by Group operations was impacted by softer market conditions coupled with the introduction of additional tariffs on imported goods causing US suppliers to shorten credit terms, which put pressure on the Group's cash generation. This credit tightening within the supply chain also became apparent in the UK in the current period. In addition, the inload of new business deferred from the six months ended 30 September 2019 was impacted towards the end of the period by COVID-19.

On 5 February 2020, and prior to the full impact of COVID-19 being realised, the Group successfully completed a Placing and Open Offer of new ordinary shares at 10p per share. A total of 14,924,285 new ordinary shares were issued, with net proceeds, after legal, professional and listing costs, of £1.335m being received by the Company.

The Group's cash outflow from operations in the current period was £0.802m (2019 Restated: £1.060m). The major contributors to the outflow were the tightening of credit terms within the supply chain, the delay in receipts from customers at the end of March as a result of COVID-19 related factory shutdowns, which were subsequently received in late April, and higher inventory at the end of the period, again as a result of customers closing due to COVID-19 and not accepting planned deliveries.

The Group's investment in capital expenditure reduced significantly in the current period to £0.161m, (2019: £0.396m). There was no expenditure on new product introduction related intangible assets in the current period (2019: £0.202m).

Net borrowing, which excludes finance leases and operating leases as defined by IFRS 16 Leases, was £3.628m (2019: £3.112m), with the Group being impacted at the period end by adverse exchange rate movements and major customers delaying payments as indicated above. Gearing was up slightly on the corresponding period to 45.4% (2019: 42.6%).

COVID-19

As a result of the impact of COVID-19, the Group has put a number of measures in place and utilised UK and US Government support in order to retain its employees and protect the Group. These include:-

· Accessing the UK and US Government furlough schemes

· Utilising the UK Government's Time To Pay scheme, deferring PAYE payment liabilities

· Deferring UK VAT payments, in line with UK Government guidance

· Successfully applying for funding through the UK Government's CBILS programme, raising £1.0m of additional funds (further details of which are set out above)

· Successfully applying for funding through the US Government's Payroll Protection Programme, raising £0.55m of additional funds

With the additional funding secured, the Group is in a much stronger position,with cash headroom of £1.8m as of 1 June 2020, as the economy begins to recover.

Balance Sheet

Total assets at 31 March 2020 were £18.587m after recognising an asset of £3.062m relating to operating leases in line with IFRS 16. To partially offset this, both current and non-current liabilities now recognise total obligations under leases of £3.109m, which represents the present value of the Group's future finance and operating lease commitments. Net assets are impacted only to the extent of the impact on profitability of £0.047m for the 12 months to 31 March 2020.

Net working capital at 31 March 2020 was £5.164m, which was £1.124m higher than at 31 March 2019 of £4.040m. This increase is a result of the delay in customer receipts at the end of March, resulting from COVID-19 related factory shutdowns and the tightening of terms within the supply chain, which has subsequently unwound, as highlighted previously.

People

The Board would like to take the opportunity to thank all our employees for their hard work and support throughout the current period and especially in the last few months. Their commitment and dedication has ensured that we continue to support our customers through these challenging times. The Board would also like to thank Phillip Lee for his significant contribution to Tricorn during his time as Group Finance Director and wish him well in his new venture.

Outlook

This has been an extremely challenging period, during which our operations worldwide have been significantly impacted by COVID-19. During March, our facilities in the USA and UK were temporarily closed due to issues with customer demand, supply chains and concerns for employee safety.

Throughout, the Board has remained focused on the safety of our employees, supporting our customers, with whom we continue to work closely, and mitigating the impact of the lower revenues on the Group's profitability and cash flow.

I am pleased to report that all of our facilities were operational from 20 April 2020 onwards. Our Chinese joint venture continues to operate normally, and, trading at our UK Malvern facility has returned to pre-COVID-19 levels. However, whilst demand has started to increase at the UKWest Bromwich and USA facilities, it is still at significantly lower levels than compared to earlier in the year.

At this time, as for many businesses, the outlook remains uncertain. We are, however, pleased that as a result of a focused plan of action, as at 1 June 2020, the Company had, as reported, cash headroom of £1.8m. This positions us well to weather these exceptional times and to capitalise on growth opportunities as we move forward.

Andrew Moss Mike Welburn

Chairman Chief Executive

Group income statement

For the six months ended 31 March 2020

	Note	Unaudited six months to 31 March 2020	Unaudited six months to 31 March 2020			Unaudited six months to 31 March 2020		Unaudited six months to 31 March 2020	Audited year ended 31 March 2019
		£'000	£'000			£'000		£'000	£'000
		Underlying	Non-Underlying			Group
Revenue	3	8,453	-			8,453		11,348	22,763
Cost of sales		(5,252)	-			(5,252)		(7,009)	(14,025)
Gross profit		3,201	-			3,201		4,339	8,738
Distribution costs		(357)	-			(357)		(512)	(1,022)
Administration costs
- General administration costs		(3,324)	-			(3,324)		(3,327)	(6,701)
- Rabun Gap start up costs		-	(115)			(115)
- Intangible asset amortisation		-	(74)			(74)		(43)	(102)
- Share based payment charge		-	(13)			(13)		(18)	(36)
Total administration costs		(3,324)	(202)			(3,526)		(3,388)	(6,839)
Operating (Loss)/profit		(480)	(202)			(682)		439	877
Share of profit from joint venture		87	-			87		132	282
Finance costs		(179)	-			(179)		(97)	(209)
(Loss)/Profit before tax	3	(572)	(202)			(774)		474	950
Income tax expense		(14)	-			(14)		(25)	(66)
(Loss)/Profit for the year and total comprehensive (expense)/income		(586)	(202)			(788)		449	884
Attributable to:
Equity holders of the parent company		(586)	(202)			(788)		449	884
Continuing Operations (Loss)/Earnings per share:
Basic (Loss)/earnings per share	4					(2.03)p		1.33p	2.62p
Diluted (Loss)/earnings per share	4					(2.03)p		1.23p	2.39p

Group statement of changes in equity

For the period ended 31 March 2020

	Share capital	Share premium	Merger reserve	Translation Reserve	Share based payment Reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2018	3,379	1,692	1,388	(23)	367	4	6,807
(unaudited)
Share based payment charge	-	-	-	-	18	-	18
	-----------------------------------------	-------------------------------------------	-------------------------------------------	-----------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Total transactions with owners	-	-	-	-	18	-	18
Foreign exchange loss on translation of Reserves	-	-	-	37	-	-	37
Total comprehensive expense	-	-	-	-	-	449	449
	-----------------------------------------	-------------------------------------------	-------------------------------------------	-----------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Balance at 31 March 2019 (audited)	3,379	1,692	1,388	14	385	453	7,311
Issue of new shares	50	-	-	-	-	-	50
Share based payment charge	-	-	-	-	14	-	14
	-----------------------------------------	-------------------------------------------	-------------------------------------------	-----------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Total transactions with owners	50	-	-	-	14	-	64
Foreign exchange gain on translation of Reserves	-	-	-	(46)	-	-	(46)
Total comprehensive expense	-	-	-	-	-	170	170
	-----------------------------------------	-------------------------------------------	-------------------------------------------	------------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Balance at 30 September 2019 (unaudited)	3,429	1,692	1,388	(32)	399	623	7,499
Issue of new shares	1,493	-	-	-	-	-	1,493
Cost of new share issue	-	-	-	-	-	(158)	(158)
Share based payment charge	-	-	-	-	13	-	13
Dividends paid	-	-	-	-	-	(69)	(69)
	-----------------------------------------	-------------------------------------------	-------------------------------------------	-----------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Total transactions with owners	1,493	-	-	-	13	(227)	1,279
Foreign exchange loss on translation of Reserves	-	-	-	1	-	-	1
Total comprehensive income	-	-	-	-	-	(788)	(788)
	-----------------------------------------	-------------------------------------------	-------------------------------------------	---------------------------------------------	------------------------------------------	-------------------------------------------	-------------------------------------
Balance at 31 March 2020 (unaudited)	4,922	1,692	1,388	(31)	412	(392)	7,991
	=========================	=========================	===========================	=========================	============================	=========================	=====================

Group statement of financial position

At 31 March 2020

		Unaudited 31 March 2020	Audited 31 March 2019
		£'000	£'000
Assets
Non current
Goodwill		391	391
Intangible assets		271	401
Property, plant and equipment		7,927	4,668
Investment in joint venture		1,219	1,191
		9,808	6,651
Current
Inventories		3,120	3,040
Trade and other receivables		4,893	4,854
Cash and cash equivalents		766	493
Corporation tax		-	6
		8,779	8,393
Total assets		18,587	15,044
Liabilities
Current
Trade and other payables		(2,849)	(3,854)
Borrowings		(4,394)	(3,675)
Obligations under leases		(585)	-
Corporation tax		(61)	(70)
		(7,889)	(7,599)
Non-current
Obligations under leases		(2,682)	(109)
Deferred tax		(25)	(25)
		(2,707)	(134)
Total liabilities		(10,596)	(7,733)
Net assets		7,991	7,311
Equity attributable to owners of the parent
Share capital		4,922	3,379
Share premium account		1,692	1,692
Merger reserve		1,388	1,388
Translation reserve		(31)	14
Share based payment reserve		412	385
Profit and loss account		(392)	453
Total equity		7,991	7,311

Group statement of cash flows

For the period ended 31 March 2020

	Unaudited	Unaudited	Audited
	six months to	six months to	year ended
	31 March	31 March	31 March
	2020	2019	2019
	£'000	£'000	£'000
Cash flows from operating activities
Profit after taxation	(788)	449	884
Adjustment for:
Depreciation	511	297	575
Net finance costs in statement of comprehensive income	179	97	209
Amortisation charge	74	43	102
Share based payment charge	13	18	36
Share of joint venture operating profit	(87)	(132)	(282)
Taxation expense recognised in statement of comprehensive income	14	25	66
Decrease in trade and other receivables	72	306	229
Decrease in trade payables and other payables	(1,003)	(195)	(542)
Decrease/(Increase) in inventories	213	(39)	(88)
Cash generated by operations	(802)	869	1,189
Interest paid	(179)	(109)	(246)
Net cash generated by operating activities	(981)	760	943
Cash flows from investing activities
Purchase of plant and equipment	(161)	(396)	(723)
Purchase of intangible assets	-	(202)	(278)
Net cash used by investing activities	(161)	(598)	(1,001)
Cash flows from financing activities
Issue of new shares	1,493	-	-
Costs of Issue of ordinary share capital	(158)	-	-
Dividends received from investments	172	-	-
Dividends paid	(68)	-	-
Proceeds of overseas short term borrowing	-	304	304
Movement in short term borrowings	365	(574)	(361)
Payment of finance lease liabilities	(322)	(42)	(84)
Net cash generated by/(absorbed by) financing activities	1,482	(312)	(141)
Net decrease in cash and cash equivalents	340	(150)	(199)
Cash and cash equivalents at beginning of period	426	643	692
Cash and cash equivalents at end of period	766	493	493

1 General information

Tricorn Group plc and subsidiaries' (the 'Group') principal activities comprise high precision tube manipulation, systems engineering and specialist fittings.

The Group's customer base includes major blue chip companies with world-wide activities in key market sectors, including Power Generation, Oil & Gas, Off Highway, Commercial Vehicles, Agriculture and Automotive.

Tricorn Group plc is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of Tricorn Group plc's registered office, which is also its principal place of business, is Spring Lane, Malvern, Worcestershire, WR14 1DA. The Group's shares are admitted to trading on the Alternative Investment Market of the London Stock Exchange.

These unaudited interim consolidated financial statements have been approved for issue on 23 June 2020 by the Board of Directors. Amendments to the financial statements are not permitted after they have been approved. Copies of this announcement are available on the Company's website, www.tricorn.uk.com.

The financial information set out in this interim report does not constitute statutory accounts as defined in the Companies Act 2006. The Group's statutory financial statements for the year ended 31 March 2019 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

2 Accounting policies

Basis of preparation

These unaudited interim consolidated financial statements are for the six months ended 31 March 2020. They have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2019, which have been prepared in accordance with International Financial Reporting Standards.

The same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements.

IFRS16 Leases - Overview

IFRS 16 replace IAS 17 and provides a single lease accounting model, requiring lessees to recognise right of use assets and lease liabilities in the balance sheet for all relevant leases.

The Group has now adopted IFRS 16 Leases under the modified retrospective approach. The adoption of IFRS 16 under the modified retrospective approach affects only the current reporting period and does not require restatement of comparative half and full year financial statements. In addition, the Board has decided to measure right-of-use assets by reference to the measurement of the lease liability on 1 April 2019 and therefore there is no immediate change to net assets at this date. After 1 April 2019 instead of recognising operating lease costs within operating profit in the Statement of Comprehensive Income the Group will recognise depreciation of the right of use asset within operating profit and interest costs of the lease liability within finance costs. This will result in a decrease in profit before tax reported of approximately £0.047m. Where appropriate and to provide comparison in the narrative, comparatives have been restated for key financial indicators.

3 Segmental reporting

As announced at the time of the final results for the year ended 31 March 2019, the Group has carried out a review of its organisation structure and concluded that segmental results will now be reported on a geographic basis as follows:

§ UK - Comprising all UK based trading divisions

§ US - Comprising all North America based trading divisions

§ The joint venture in China will continue to be reported separately

The financial information detailed below is frequently reviewed by the Chief Operating Decision maker.

6 months to 31 March 2020 (unaudited)
	UK	US	Unallocated	Joint Venture	Total
	£'000	£'000	£'000	£'000	£'000
Revenue
- From external customers	5,125	3,328	-	-	8,453
- From other segments	-	-	-	-	-
	5,125	3,328	-	-	8,453
Segmental (loss)/profit before tax	(208)	(360)	(91)	87	(572)
Rabun Gap start up costs					(115)
Intangible asset amortisation					(74)
Share based payment charge					(13)
					________
Profit before tax					(774)
Segmental total assets	10,371	6,738	1,478	-	18,587

6 months to 31 March 2019 (unaudited)
	UK	US	Unallocated	Joint Venture	Total
	£'000	£'000	£'000	£'000	£'000
Revenue
- From external customers	7,047	4,301	-	-	11,348
- From other segments	59	-	(59)	-	-
	7,106	4,301	(59)	-	11,348
Segmental profit/(loss) before tax	596	(146)	(47)	132	535
Intangible asset amortisation					(43)
Share based payment charge					(18)
					_________
Profit before tax					474
Segmental total assets	6,993	6,171	1,880	-	15,044

3 Segmental reporting (continued)

Year ended 31 March 2019
	UK	US	Unallocated	Joint Venture	Total
	£'000	£'000	£'000	£'000	£'000
Revenue
- From external customers	14,022	8,741	-	-	22,763
- From other segments	59	-	(59)	-	-
	14,081	8,741	(59)	-	22,763
Segmental profit/(loss) before tax	980	46	(220)	282	1,088
Intangibles amortisation					(102)
Share based payment charge					(36)
					_________
Profit before tax					950
Segmental total assets	6,993	6,171	1,880	-	15,044

4 Earnings per share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

	Six months ended 31 March 2020
	Profit	Weighted average number of shares	Earnings per share
	£'000	Number '000	Pence
Basic loss per share	(788)	38,862	(2.03)
Dilutive shares		-
Diluted loss per share	(788)	38,862	(2.03)

	Six months ended 31 March 2019
	Profit	Weighted average number of shares	Earnings per share
	£'000	Number '000	Pence
Basic earnings per share	449	33,795	1.33p
Dilutive shares		2,745
Diluted earnings per share	449	36,540	1.23p

4 Earnings per share (continued)

	31 March 2019
	Profit	Weighted average number of shares	Earnings per share
	£'000	Number '000	Pence
Basic earnings per share	884	33,795	2.62p
Dilutive shares		3,248
Diluted earnings per share	884	37,043	2.39p

The directors consider that the following adjusted earnings per share calculation is a more appropriate reflection of the Group's performance.

				Six months ended 31 March 2020
				Loss			Weighted average number of shares		Loss per share
				£'000			Number '000		Pence
Basic loss per share				(788)			38,862		(2.03)
Amortisation of intangible asset				74
Rabun Gap start up costs				115
Share based payment charge				13
Adjusted loss per share				(586)			38,862		(1.51)
Dilutive shares							-
Diluted loss earnings per share				(586)			38,862		(1.51)
			Six months ended 31 March 2019
			Profit			Weighted average number of shares			Earnings per share
			£'000			Number '000			Pence
	Basic earnings per share		449			33,795			1.33p
	Intangible asset amortisation		43
	Share based payment charge		18
	Adjusted earnings per share		510			33,795			1.50p
	Dilutive shares					2,745
	Diluted adjusted earnings per share		510			36,540			1.40p
			31 March 2019
			Profit			Weighted average number of shares			Earnings per share
			£'000			Number '000			Pence
	Basic earnings per share		884			33,795			2.62p
	Intangible asset amortisation		102
	Share based payment charge		36
	Adjusted earnings per share		1,022			33,795			3.02p
	Dilutive shares					3,248
	Diluted adjusted earnings per share		1,022			37,043			2.76p

There is no dilution to the basic or adjusted loss per share in the current year owing to a loss being reported in the year.